Research &                       Evaluation of                       Shared Services                       Projects4529_Ao...
Contents                           Executive Summary	                                                         3           ...
Executive Summary                           This is the executive summary of an evaluation of the shared services supporte...
The study identified all of these benefits accruing across the case studies, with                           concentrations...
From a review of the case study projects, a number of other factors emerge. Those showing                           fundam...
Theme                  Lessons Learned                                                            Addresses               ...
1. Introduction                           1.1 The Study                           The specific objective of this study was...
2.	Issues and Programme                           2.1	 What are Shared Services?                           Collaboration h...
While the potential benefits of shared services are diverse they can be broadly classified                           withi...
However, despite their potential it is important to recognise that shared services are not                           a pan...
Figure 2.3: FE Collaboration Structures                            Significantly                            less control  ...
2.4 The Programme                           The Shared Services agenda in Further Education is being taken forward at a nu...
3. Method                           3.1 Approach                           The approach undertaken in the evaluation compr...
3.4 Self-Assessment Tool                           In addition to interview, project participants were invited to complete...
Figure 3.2: Scoring Categories                             Category      Sub-categories            Description            ...
4. Key Considerations                           4.1 Critical Factors                           The logic for sharing servi...
4.2 Leadership                           The shared services agenda creates new and diverse challenges for FE leaders, at ...
Each of the above models has their own advantages, disadvantages and challenges and it is                           import...
However, it is important to recognise that ‘leaders’ may often be required to drive through                           chan...
“ here is a slight reliance on external support, and sometimes the ownership rests more with                            T ...
Figure 4.3 below summarises the primary barriers and enablers identified in relation to                           leadersh...
• The way in which leaders act; and                       • The informal history of the College (JISC, 2011).             ...
“ here are differences in the organisational cultures of the three colleges in my judgement.                            T ...
“ ollaboration can potentially make colleges a bit more like private providers enhancing their                            ...
“ t’s about trust, you have to be trusted. It takes time and you need to live it as well as say                           ...
Figure 4.5 below summarises the primary barriers and enablers identified in relation to                           culture ...
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
Efficiency Innovation Fund Research Report
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Efficiency Innovation Fund Research Report

  1. 1. Research & Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 1 2/15/12 11:39 AM
  2. 2. Contents Executive Summary 3 1. Introduction 7 2. Issues and Programme 8 3. Method 13 4. Key Considerations 16 5. Types 31 6. Outcomes and Lessons Learned 37 Bibliography 46 Annex A: Self Assessment Tool 48 Annex B: Scoring Matrix 53 Annex C: Scores Allocated to Case Study Colleges 55 Annex D: EIF Projects – Lessons Learned 61 For more information and guidance on AoC Shared Services see: www.aoc.co.uk/en/policy-and-advice/aoc-procurement-team/shared-services4529_AoC_research_report_AW2.indd 2 2/15/12 11:39 AM
  3. 3. Executive Summary This is the executive summary of an evaluation of the shared services supported by the Further Education (FE) Efficiency Innovation Fund (EIF), which was undertaken by Centrifuge Consulting on behalf of the Association of Colleges (AoC). It should be noted that this report is an initial stage report that will require follow up. The report is based on the initial findings of research with EIF projects and as such it focuses on their experiences to date. Further work will be undertaken to build on this research, identify further lessons from the ongoing experiences of these projects and to translate these into resources to support colleges looking to develop shared services. The specific objective of the study was to undertake a formative evaluation of EIF supported projects to identify and understand wider lessons about the nature of college collaboration in terms of: Leadership and Governance; Process; and Culture. The evaluation method comprised: a review of documentation from the projects; a self-completion on-line questionnaire sent to all project leads; and interviews with the partners involved in 12 case study projects. The EIF supported 41 projects involving over 180 Colleges across the FE sector in England to develop shared service projects. Shared Services are defined by the AoC as: “Thesharedprovisionbymorethanoneorganisationofaspecificserviceorfunction”. Projects vary significantly across a number of factors, including: number of partners (ranging between 2 and 8); activities covered (from a single function, such as human resources, to full merger); and stage of development (from initial feasibility to implementation start). Developing organisational resilience is at the core of shared services. The figure below provides an overview of the various potential benefits of developing a shared service, within the three overarching categories of: efficiencies; improvement; and growth. Potential Benefits Efficiencies Improvement Growth Cost savings and streamline More joined up services/functions Increased capacity and benefits processes from scale Reduced duplication Improved services/function Improved reach of services effectiveness Shared risk Knowledge exchange, shared and Widened experience and growth improved skills and learning opportunities Research Evaluation of Shared Services Projects | 34529_AoC_research_report_AW2.indd 3 2/15/12 11:39 AM
  4. 4. The study identified all of these benefits accruing across the case studies, with concentrations in experience and knowledge, and in cost savings and joining up services. While some projects are able to quantify anticipated benefits, it is not possible to assess the extent of programme cost benefits at this stage. Where cost benefits have arisen to date, they tend to arise from joint senior management posts or joint procurement of services. A review of the key themes across the programme led to the identification of a series of barriers to, and enablers of, progress. Communications was a central theme, as was trust between partners. These are summarised in the figure below. Barriers Enablers Leadership Abrogating control to external consultants Personal relationships between key players Pressures on management time Clear leadership role (“champion”) Large number of partners Collaborative working with shared values Lack of commitment from all partners External support (but not ownership) Active Governor involvement Good communications channels Culture Perceived Loss of control Good communications channels Competition Geographical or functional similarities Entrenched management systems Institutional and personal trust Different institutional traditions Common interests Shared learning Process Lack of resource/time Allocating college time and resource in addition Insufficient planning to EIF funds Uncertainties among staff over future Clear and transparent agreement between partners Unclear objectives Trust between partners Lack of observable outcomes Communicating the objective to all staff Focus on administrative obstacles (e.g. VAT) Learning from others Clarifying costs and benefits Celebrating success 4 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 4 2/15/12 11:39 AM
  5. 5. From a review of the case study projects, a number of other factors emerge. Those showing fundamental change: • all have strong leadership with collective participation; • are slightly more likely to have an internal focus; • have costs as a significant factor, although two were entirely service driven; • tend to have strong institutional linkages; • have some basis in pre-existing personal relationships; and • exhibit strong additionality in terms of bringing existing plans forward. with low level change: • have less focused leadership; • uncertain, or differing aims; • tend to have an internal focus; • have cost as their main priority; • have limited pre-existing relationships; and • are more likely to be funding-driven. The figure below summarises the key lessons that arose from the evaluation, and their relationship to the three investigation themes. Further detail on lessons learned can be found in section 6 of the report. Key Lessons Theme Lessons Learned Addresses Open and Between leaders organisations: Continuous • To ensure clarity of purpose and ensure complete agreement on Leadership Communication direction of travel. • To ensure ongoing commitment. Process • To maintain trust between partners. Culture Within organisations: • To ensure leader and Governor buy-in and awareness of intentions Leadership and direction of travel. • To ensure staff participation and awareness of change. Culture • Requires consideration of organisational decision making procedures Process and timescales. Research Evaluation of Shared Services Projects | 54529_AoC_research_report_AW2.indd 5 2/15/12 11:39 AM
  6. 6. Theme Lessons Learned Addresses Preconditions Preconditions: Development Time • Need for shared organisational ambitions and ethos. Culture • Benefits of a history of collaboration among partners and an Leadership established direction of travel. • Need to be aware of organisational starting points. Culture • Concerns regarding independence and competition are considerable Culture barriers. • Careful consideration should be given to the number of partners Process involved. • Need for complete commitment and buy-in from partners. Leadership Development: • Pre-bid information/induction and training to ensure partners are Process aware of what they are signing up for. • Need to spend considerable time up front developing Leadership relationships, having open and honest communications and developing a shared vision. • Need to develop and maintain trust. Culture • Establish rules, roles and responsibilities at an early stage. Process Timescales • The active involvement of smaller/leaner organisations has been Process Resources effected by significant capacity issues. • Many partners experience capacity issues as staff are required to Process continue do their day jobs while simultaneously driving this forward. • The investment required to share back office functions can be Process considerable, particularly where ICT based solutions are central. • Projects may underestimate resources required to implement shared Leadership services. What appears simple at a superficial level will involve numerous layers of complexity. • It takes time to explore, develop and implement shared services and Process show results. Unexpected • Developing shared services is a learning process for all involved with Culture outcomes significant contributions to personal and professional development. • The process results in significant knowledge transfer both within and Culture across individuals and organisations. • Stimulates a sense of strategic critical reflection in participating Culture organisations. • Can lead to improved relationships with specific partners and generate Process spin-out collaborative activities. 6 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 6 2/15/12 11:39 AM
  7. 7. 1. Introduction 1.1 The Study The specific objective of this study was to undertake a formative evaluation of a sample of Efficiency Innovation Fund (EIF) supported shared services projects to identify and understand wider lessons about the nature of college collaboration in terms of: • Leadership and governance; • Process; • ulture. C 1.2 The Report The remainder of the report is structured as follows: • ection 2 provides an overview of the shared services context and agenda and the FE S Efficiency and Innovation Fund; • ection 3 discusses the method used within this study; S • ection 4 examines the experiences of Efficiency and Innovation Fund supported projects S against key considerations and critical factors in the development of shared services in FE; • ection 5 examines the ways in which these key considerations and critical factors impact S upon FE shared services projects, and describes a typology for understanding this; and • Section 6 reviews key outcomes identified through this study and the key lessons learned by Efficiency and Innovation Fund supported projects. In addition, there are three Annexes: • nnex A, shows the on-line self-assessment tool (SAT) that representatives from all A Efficiency Innovation Fund supported projects were invited to complete; • nnex B, shows the scoring matrix that was utilised to assess the sample of Efficiency A Innovation Fund supported projects in terms of leadership, process and culture; and • nnex C, shows the scores allocated to the anonymised sample of Efficiency Innovation A Fund supported projects that have informed this study. Research Evaluation of Shared Services Projects | 74529_AoC_research_report_AW2.indd 7 2/15/12 11:39 AM
  8. 8. 2. Issues and Programme 2.1 What are Shared Services? Collaboration has increasingly moved up the public services agenda as the funders and deliverers of these services have sought to address the challenges of maintaining and improving service levels and standards amid decreasing resources. Within this context the term “shared services” has becoming increasingly used to describe the process of collaboration by which organisations work collaboratively to develop and deliver a specific service strand, process or function. Shared Services are: “ he shared provision by more than one organisation of a specific service or function” T – Association of Colleges (2011) “ here two or more organisations work together to deliver services through new, joint W delivery restructures” – Chartered Institute of Public Finance Accountancy (2010) “ nstitutions cooperating in the development and delivery of services, so sharing skills and I knowledge”– JISC (2008) “ model of providing services (not just so-called ‘back-office’ services) in a combined or a collaborative function, sharing processes and technology” – KPMG (2006) Therefore shared services do not by definition threaten the independence or sovereignty of organisation. Nor does it necessarily involve the outsourcing of services or functions to an external provider or a first step in a process towards inevitable merger; although in one instance observed in the case studies, the exploration of shared services has led to both parties agreeing that merger is the optimal option. 2.2 Why Share Services? A range of external and internal factors drive the shared services agenda. Principal among these is the need to generate efficiencies and do ‘more for less’ due to reductions in funding levels. Therefore at a superficial level the rationale for shared services appears simple. By sharing services and functions it is assumed that partners will be able to eliminate waste and reduce inefficiencies (Cabinet Office, 2005). “ hared services is more than just centralisation or consolidation of similar activities in one S location, it is the convergence and streamlining of similar functions within an organisation, or across organisations, to ensure that they are delivered as effectively and efficiently as possible” – Scottish Government (2011) However, while reduced funding is one of principal drivers and generating efficiencies one of the main potential benefits of the sharing process it is by no means the only reason for this activity. Improved service delivery and development of functions are also important factors. 8 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 8 2/15/12 11:39 AM
  9. 9. While the potential benefits of shared services are diverse they can be broadly classified within one of the following three categories: • Efficiencies; • Improvement; Figure 2.1: The Benefits • Growth. Growth Resilience Improvement Efficiencies Developing organisational resilience is at the core of this agenda with the other three potential benefit categories serving to enhance the sustainability of the organisations involved in developing shared services. Table 2.2 below provides an overview of the various potential benefits of developing a shared service, within the three overarching categories outlined above. Table 2.2: Potential Benefits Efficiencies Improvement Growth Cost savings and streamline More joined up services/ Increased capacity and benefits from processes functions scale Reduced duplication Improved services/function Improved reach of services effectiveness Shared risk Knowledge exchange, shared Widened experience and growth and improved skills and learning opportunities Sources: Bland (2010); CIPFA (2010); JISC (2008); NAO (2007); CBI (2010) The potential benefits of shared services illustrate that this approach can form an important part within strategies for growth, by driving innovation, opening up new commercial opportunities and potentially leading to sustainable service transformation. Consequently shared services should not simply be seen as part of a cost saving agenda or as a purely reactive process. “ meanstodeliverefficiencies,serviceimprovementandorganisationalresilience” a – AoC (2011) Research Evaluation of Shared Services Projects | 94529_AoC_research_report_AW2.indd 9 2/15/12 11:39 AM
  10. 10. However, despite their potential it is important to recognise that shared services are not a panacea and will by no means be appropriate in all circumstances. Instead they should be seen and utilised as part of a blend of approaches available to drive improvement and efficiency within organisations. 2.3 What Services can be shared and how? While definitions over the term may differ it is clear that there are a range of services, business processes and functions, areas of expertise and various other aspects of an organisation that can be shared among partners. This is particularly true where organisations are operating within the same sector and dealing with similar processes and functions. When identifying potential areas that are most suited to a shared services solution many have traditionally focused on so called ‘back office’ functions that are transactional or rules based in nature. For example research undertaken by Bland (2010) on behalf of the then Learning and Skills Council identified the following areas as possible appropriate workstreams: • Human Resource Management; • Finance; • Student Services; • Information Technology; • Procurement. All of these areas are reflected within the activities funded through the AoC Efficiency Innovation Fund. Although these areas clearly have considerable potential for shared service development they are by no means the only areas in which such a solution may be appropriate. In some cases the sharing of ‘front office’ services, such as curriculum development and delivery, may be appropriate. Therefore all areas of an FE College’s operations can and should be considered for the development of shared services. However, it should be noted that not all processes or services will be open to sharing in every circumstance with a range of contextual factors at play, including for example competition between colleges or technology costs of alignment, or the wider funding climate. Given the array of functions and services that can be shared, shared services should be seen as a continuous process. Indeed the experiences of the projects used as case studies to inform this research have revealed a wide range of starting points which in turn impact upon the proposed and actual partnership end points in terms of what is being shared and how. This will be considered in detail throughout the remaining sections of this report. 2.4 How can Services be shared? The actual process of delivering shared services is equally open with a range of potential models and levels of sharing that can occur with the shared services journey of an individual organisation or partnership. Figure 2.3 is taken from Bland (2010) and outlines a continuum of potential approaches and structures for College collaboration alongside associated risks and barriers. 10 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 10 2/15/12 11:39 AM
  11. 11. Figure 2.3: FE Collaboration Structures Significantly less control Third party provider takes full responsibility for managing Outsource and operating services. more risk/ barrier Member organisations operate within a shared governance umbrella. Each organisation retains independent legal Federal Structure status, but is fully accountable via local boards to federal governance structures. A contractual arrangement with a third party provider to Strategic partner provide Shared Services (e.g. College A and a Private Company). Joint procurement of services based on a shared strategy and harmonised business processes and designed to provide shared Commissioning Collaboration service provisions to its members (e.g. the LSC Collaboration Fund projects were mainly focused on this model). An agreement between two or more organisations to set up Joint Initiative and operate Shared Services (e.g. College A and College B establish a separate Shared Services department). Centralising a business service that will be shared by other Lead Department organisations (e.g. College A shares Finance with College B; College B shares HRM with College A). Merger The acquisition of one college by another . Greater control less risk/ A single organisation centralising business services. Unitary barrier However, the experiences of colleges suggest that there are a range of other potential structures and approaches that sit across and between those outlined above. For example, one particular project is moving forward with a more informal collaborative model in which services and functions such as continuous professional development (CPD) training and specialist staff skills such as virtual learning environment development are shared between partners on an in-kind basis. Yet another project is focused on entirely transforming the organisational model upon which colleges are traditionally based. Research Evaluation of Shared Services Projects | 114529_AoC_research_report_AW2.indd 11 2/15/12 11:39 AM
  12. 12. 2.4 The Programme The Shared Services agenda in Further Education is being taken forward at a number of levels. A central component of this work has been the first two rounds of the Efficiency and Innovation Fund through which AoC provided funding support to ensure that partners are working towards the delivery of agreed outcomes. Through these projects Colleges are being supported to test a range of potential collaborative model for frontline services or back office functions with a range of partners, including other Colleges, Schools, Higher Education Institutions and Local Authorities in order to: • Identify ways of improving service delivery of both back office functions and frontline services; • Determine where efficiency savings can be made; and • Find solutions to barriers and problems that collaborating groups can come up against. 12 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 12 2/15/12 11:39 AM
  13. 13. 3. Method 3.1 Approach The approach undertaken in the evaluation comprised four components: • review of documentation held by AoC; A • The selection of a sample of projects for detailed follow-up; • The circulation of an on-line self assessment tool, which was circulated to all those selected for case studies, and subsequently to all remaining project leads; and • he development of a scoring system around the three key areas of: Leadership; Culture; T and Process; drawn from the data collected in interview with the case study projects. These are described below. 3.2 Documentation Review The programme has generated significant information resources for AoC, comprising project proposals, updates, and, where completed, business cases. A particularly helpful piece of information was that the projects were required to return a ‘lessons learned’ form. The ways in which information was presented varied across projects, with, for example, some projects producing detailed business cases in excess of 100 pages and others supplying more limited information. 3.3 Case Studies A series of projects were recommended by AoC for follow-up as part of the case studies to inform the evaluation. These were not chosen on any shared sampling approach, but were simply selected by AoC on the basis of potential interest. The scope of this sample shifted over the study with, sufficient information being collected on 12 projects to enable more detailed analysis and scoring (see Section 3.5 below). Since the current evaluation is of the programme as a whole, rather than individual projects, the case study projects are not identified, and all interviewees were given the assurance that their projects, and individual responses, would not be identified in this report. As part of a separate exercise, publicly available case study documentation will be published on the AoC website for approximately half of the 41 participating projects. Interviews were undertaken with project leads of the case study colleges either face to face or by telephone. In addition, interviews were held with project contacts in participating colleges, where this was possible. However, the detailed qualitative information obtained through interview provided a key insight into the practicalities of project development, and plays an underpinning role in the analysis contained in this report. 13 Research Evaluation of Shared Services Projects | 4529_AoC_research_report_AW2.indd 13 2/15/12 11:39 AM
  14. 14. 3.4 Self-Assessment Tool In addition to interview, project participants were invited to complete an on-line self assessment tool (SAT), which is reproduced as Annex A. The SAT was a short survey incorporating 24 closed questions which aim to gather partner perceptions of key enablers and inhibitors in the development of their shared service. The SAT was structured around the four critical factors in the development of successful shared services, with communication a common theme throughout. These four factors are shown in Figure 3.1, below. Figure 3.1: SAT Factors Leadership Culture Climate Process Externalities Governance Shared vision Readiness or openness to Partner Selection Tax objectives change Co-operative and Staff motivation and Creating awareness Existing contracts collegial commitment Key individuals Personalities and Change management Pensions and relationships employment law Universal ownership Organisational cultures Memorandum of Competition and understanding procurement law Willingness to share Appetite for risk Resources and timescales Systems compatibility and connectivity Transparent decision Trust Project management Sector environment making and clear roles and responsibilities The SAT contained a single question for each of the 24 sub-categories or building blocks shown above. The SAT was completed by 41 individual respondents, representing 32 separate projects (78% of all projects). Analysis of these responses has informed the report. 3.5 Scoring System Through the interview process, a scoring system was developed to assess whether or not there was an emerging typology of the key factors under investigation. This built on, and simplified, the strands in the SAT described above, focusing on Leadership, Culture and Process, and developing sub-categories arising from observed behaviours and responses from the case study interviews. The categories and behaviours are summarised in Figure 3.2 below, and the full scoring system is reproduced as Annex B to this report. The impact of these considerations is discussed in Section 4. 14 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 14 2/15/12 11:39 AM
  15. 15. Figure 3.2: Scoring Categories Category Sub-categories Description Leadership Command Control Strong, directive leadership, often coming from a single source Transformational Inspirational and distributed Collective/Functional Task oriented and co-operative Process Defensive Reaction to external threat (e.g. competitors) Transformative Using change to develop strategic response (e.g. to reposition the offer) Cost-driven Using change to manage costs Culture Institutional Built on organisational compatibilities (e.g. geography; function) Personal Built on personal relationships (e.g. between principals) Responsive Opportunist – built on developments The scores allocated in the case studies are summarised in Section 5, below. 3.6 Summary The analysis in this report is therefore based on the synthesis of four separate information sources, summarised in Figure 3.3 below. Figure 3.3: Method Case Study Interviews Self-Assessment Tool Scoring System Documentation Review Research Evaluation of Shared Services Projects | 154529_AoC_research_report_AW2.indd 15 2/15/12 11:39 AM
  16. 16. 4. Key Considerations 4.1 Critical Factors The logic for sharing services appears self-evident. However, developing shared services is not without its challenges and as cannot be viewed as a quick fix or easy solution. Neither will they be suitable for all services or processes within all partnership configurations in all circumstances. Therefore shared services should be considered as one of a suite of options for driving efficiency and improvement within FE. “ hedeeperyougothemorecomplexanddifficultitbecomes” t – EIF funded project partner The shared services development process alone presents a number of potential leadership, culture and process related issues, alongside external challenges to do with issues such as taxation and law which have been highlighted in some detail among other AoC publications (Eversheds, 2011; Mills Reeves, 2011) Therefore despite the potential benefits summarised in Section 2, the evidence base and the experiences of EIF supported projects show that there are a number of challenges and barriers that partners need to be aware of and take steps to address, if collaboration and shared services are to prove successful. These challenges are numerous and can relate to organisational structures, processes and cultures, logistical and external demands as well as personalities and relationships. Figure 4.1 below provides a summary overarching framework for understanding the key considerations associated with collaborative working and the delivery of shared services. Figure 4.1: Key Considerations Leadership Process Culture These key considerations will be discussed in some detail below. 16 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 16 2/15/12 11:39 AM
  17. 17. 4.2 Leadership The shared services agenda creates new and diverse challenges for FE leaders, at a time when they are simultaneously dealing with the challenges and pressures associated with reductions in funding streams. Additionally the ways in which leadership is structured or demonstrated within the development and delivery of shared services is a complex issue which has considerable implications for such activities. “Leadership...isaboutcopingwithchange” – Kotter (2001) In order to ensure that leaders in the sector are able to respond to these challenges and leadership is both structured and exercised appropriately within shared services environments it is important to gain an understanding of what constitutes effective leadership in this context. There is no one single effective approach to leadership. It can, and is, exercised through a variety of means and has been conceptualised in numerous different and constantly evolving models. However, discussions of leadership largely locate these models on a spectrum ranging from traditional top-down command and control approaches to collective or distributed models of leadership. For the purposes of this research we will be focusing on the following three specific leadership models: • Command and control or transactional leadership; • Transformational leadership; and • Collective or distributed leadership. Figure 4.2, below outlines some of the core components of these three models. It should be noted that with the exception of ‘command and control’ the terms used for the categories below are by no means universal with various different terms used to describe what are widely accepted as relatively distinct models of leadership. Figure 4.2: A Spectrum of Leadership Models Command and Control Transformational Collective/Distributed/Functional • Focused on the power • Leadership is more participative, • Leadership embodied in a group of senior leaders distributed and devolved of people rather than an individual • Relies on hierarchy • Leaders shape organisational • Leadership as, dynamic and task • Assumes that work is goals and inspire staff to oriented done because of reward achieve them • Leadership not restricted to specific and penalty structures • Places an emphasis on the organisations or structures charismatic qualities of ‘leaders’ Sources: Govindji Linley (2008); CEL/LSIS (2008); Burns (1978); LSIS (2010); Collinson Collinson (2007). Research Evaluation of Shared Services Projects | 174529_AoC_research_report_AW2.indd 17 2/15/12 11:39 AM
  18. 18. Each of the above models has their own advantages, disadvantages and challenges and it is important to acknowledge that no one model of leadership is appropriate or fully effective in 100% of circumstances. Here it is important to recognise the significance of the conditions in which leader-led relations and practices are occurring with interactions around the shared services agenda occurring within shifting contexts. Research conducted by Collinson Collinson (2007) suggests that staff in FE prefer models based on consultation and distribution wherever possible, suggesting that collective or distributed leadership models are most appropriate for the sector. However, the same research discovered that despite a preference for these models, FE principals and other senior managers feel that they sometimes have to adopt more controlling and directive styles that are close to the command and control model. This points to the potential importance of what Collinson Collinson (2007) term ‘blended leadership’: “ n approach that combines specific elements of traditional ‘top down’, hierarchical a leadership with more contemporary aspects of ‘distributed leadership‘”. ‘Blended leadership’ can therefore be understood as harnessing the structure and strategic clarity of command and control approaches with the shared responsibility, empowerment and task oriented nature of distributed models. The concept of blended leadership in FE is supported by recent research by the Learning and Skills Improvement Service (2010): “ uring...challenging circumstances...it may be necessary for leaders and managers to adopt d a style that blends elements from different models”. Our research with a sample of EIF supported projects has shown that shared services projects are likely to involve a range of complex relationships and developments within and across each of the organisations or institutions involved. Successfully delivering such projects therefore requires leaders to be willing and able to operate within a devolved and collective leadership environment rather than through direct authority. This is especially the case in partnership working, since each college is autonomous, and any change requires agreement from the leadership teams in each organisation. The tendency, exhibited in four of the case studies, for some partners to ‘wait and see’ before commitment points to the scale of this challenge. Therefore the model of leadership that is variously labelled as ‘collective’, ‘distributed’ or ‘functional’ is paramount here, as this views leadership as action centred and task oriented through a set of behaviours and processes that help a group perform their task or reach their goal rather than leadership as being related to a specific person or role. By emphasising team working and communication alongside a shared sense of purpose, responsibility and achievement, our research to date suggests that distributed approaches to leadership are fundamental to the successful delivery of change both within and across organisations. Indeed, stakeholder consultations suggest that such a people and task centred approach often increases in importance when dealing with organisational change. This is particularly the case when the pressures of such change begin to impact on staff. Open communication, trust and a sense of empowerment are key here and these are integral attributes and outcomes of processes led in a distributed manner. 18 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 18 2/15/12 11:39 AM
  19. 19. However, it is important to recognise that ‘leaders’ may often be required to drive through change and champion the shared services agenda against some resistance among staff, with one project leader suggesting that partners had to already be “lean” before committing themselves to further change. In such circumstances some of the characteristics of the ‘command and control’ leadership model are desirable. However, leaders operating a purely command and control approach to leadership may be resistant to the shared services agenda, viewing the development of any such services as a loss of sovereignty, although it could alternatively be seen as a means of widening influence. It is clear, however, that there is a need for clear direction of shared services projects. “ ommitment from the ‘top’ is necessary to drive the [shared services] project forward” c – EIF supported project partner It is important to recognise that collaboration can neither operate in a vacuum or be imposed, as it requires the full support, buy-in and commitment of all members. Evidence from EIF supported projects shows that for this reason, projects with larger numbers of partners (5-8) take longer to develop than those with only two, and are more likely to experience partner drop-out. Representatives of organisations involved in EIF supported projects emphasised the importance of leadership buy-in for the successful development of shared services. Where this is lacking shared services projects are destined to fail. This requires all partners to take an active role in the leadership process, which in turn requires organisational leaders who are willing and able to operate in a collective or functional leadership environment. For some FE leaders this may be challenging, with the experiences of the EIF projects suggesting that some leaders may equate their participation in such an environment through the development of a shared service as in some way constituting a loss of sovereignty or organisational independence. Clearly this represents a considerable challenge for the sector. In governance terms this generates a requirement to ensure that clear and equitable governance arrangements are in place within shared services partnerships to ensure that transparent decision making is embedded within the development process. Evidence from across EIF supported projects suggest that such approaches are largely commonplace, although there are some exceptions. While all leaders need to take an active role in the leadership of the shared services development process many consultees emphasised the need for a specific ‘champion’ or champions to drive the project. In particular consultees felt it was important to recognise that those charged with developing and delivering shared services are doing so while simultaneously delivering their “day jobs”. “ omebody really needs to drive the project forward. Without a driving force, projects will S fail as we all lead very busy and complicated lives with changing agendas” – EIF supported project partner Often this driving force comes from the lead institution with a number of the partners consulted speaking highly of the role they play. For example, one consultee spoke highly of their lead institution in terms of the “very strong and charismatic leadership...of people with a long term interest in shared services”. However, in at least one case it was proposed that there was a lack of leadership among partners with an externally appointed consultant effectively acting as the driving force for that particular project: 19 Research Evaluation of Shared Services Projects | 4529_AoC_research_report_AW2.indd 19 2/15/12 11:39 AM
  20. 20. “ here is a slight reliance on external support, and sometimes the ownership rests more with T external advisors than college staff”. This highlights the importance of active leadership by college leadership teams throughout the shared services development process, as while the external project manager can manage a process, they do not have the authority to deliver the actual shift within individual colleges. In another of EIF supported projects it was proposed that engagement and the cascading of information between operational staff charged with the practicalities and intricacies involved in translating an overarching shared vision into something tangible and the principals and governors of the participating colleges has been insufficient. As a consequence there is a suggestion that these leaders are not fully aware of the precise nature and details of the proposed shared service evolving out of this project. These examples highlight the significance of communication and capacity. In many cases smaller colleges and private sector providers face challenges in providing the leadership necessary to drive shared services due to their leanness as organisations and the subsequent restrictions on their ability to allocate resources and time to additional activities. As a consequence a number of these smaller organisations have been unable to play as active a role in this process as they have desired. “ eadership is split where appropriate, however the smaller colleges in the project do not L have sufficient resources to commit to taking up leadership roles” – EIF supported project partner The role of Governors/members of corporations is an important consideration here with approaches to engaging these groups differing relatively significantly among the EIF projects. For example, one consultee described the involvement of governors as follows: “ shared vision was developed by the Principals of the partnership in agreement with A Chairs of Corporations. Documents were discussed during development at Corporation meetings – both committee and full corporation and an event was held to bring together all Principals and Chairs of Corporations together and to agree a common way forward. This was followed by a Leadership and Management conference for senior and other management within colleges, bringing together some 40 plus staff” Another project with a number of partners has put significant resources into bringing Governors together, with three joint meetings over the initial development of activities, in order to ensure understanding and commitment. In one case, the Principal had to help pace an enthusiastic governor’s group, who wanted to move the project forward more quickly than the tempo for change within the institution, or the stage of development of the project, would allow. By contrast another consultee stated that the Governors of the colleges involved in their shared services projects have not been actively engaged by those leading the process and as such “they [the governors] do not know what’s going on”, casting doubt over whether any transformational change could actually be achieved and presenting significant challenges to proposed implementation timescales. Clearly this has significant implications for the successful development of shared services as any change will require at the very least, Governor consent, and ideally, active commitment. 20 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 20 2/15/12 11:39 AM
  21. 21. Figure 4.3 below summarises the primary barriers and enablers identified in relation to leadership within projects. Figure 4.3: Leadership – Barriers and Enablers Barriers Enablers Abrogating control to external consultants Personal relationships between key players Pressures on management time Clear leadership role (“champion”) Large number of partners Collective leadership/collaborative working with shared values Lack of commitment from all partners External support (but not ownership) Active Governor involvement Good communications channels 4.3 Culture “ ultureinvolvesboththeexplicitwayofworking–theformalsystemsandprocessesin C placeandhowtheyoperate,andthetacitlevelofoperation–theinformalandsemi-formal networksandotheractivitiesthatpeopleemploytogetthingsdoneandby-pass,subvertor seektoinfluencethemoreformalprocesses”– JISC (2011) While culture is often cited as a key challenge in the development of shared services (CIPD, 2010) and as a key issue in the college merger process (CEI, 2003) there is often a degree of opaqueness around what it is that the term is actually being used to encapsulate. Indeed some question as to whether any organisation can claim to have a distinct and integrated pattern of shared beliefs or behaviours (Martins, 2002). However, there is a considerable body of support for the idea that asserts that culture both exists and that its management and direction is an integral part of the development of successful organisations and partnerships (Peters and Waterman, 1982; CIPD, 2010). Indeed consultations with partners involved in the delivery of EIF supported projects used the term often when discussing the enablers and barriers encountered within their project. In this context the term ‘culture’ is essentially used to describe the environment or context in which shared services are being developed. It therefore involves both the formal ways of working through the operation of an organisations specific systems and processes as well as more informal or unstated ways of working through networks and activities that are utilised in order to achieve objective in a manner which may circumvent or influence the formal processes in place. In this sense culture can be permeated through a variety of means, including: • The ethos and philosophy of the College; • The mission statement; • The criteria for evaluating and rewarding performance; • The approach to change which is adopted; Research Evaluation of Shared Services Projects | 214529_AoC_research_report_AW2.indd 21 2/15/12 11:39 AM
  22. 22. • The way in which leaders act; and • The informal history of the College (JISC, 2011). Essentially culture is therefore about the development of shared narratives and processes. Given the multiple drivers and determinants of an organisation’s culture it is important to recognise that there is no one generic culture across the FE sector, with different organisations having different cultures. Clearly leaders have a central role to play in nature of an organisations culture, which in turn impacts upon the ways in which it engages with the shared services agenda. It is this which makes organisational culture particularly significant, playing an integral role in determining how partners operate within a shared services environment and in turn the ways in which those shared services develop or otherwise. Therefore in the context of exploring, developing and implementing shared services it is important to consider the culture within a partnership as well as that of the organisations the partnership is comprised of. Within partnerships relationships are essential, effectively forming one of the key variables which determine the development of and outcome of the partnership process. “ ehaveasharededucationalethosandarelookingtodriveinstitutionsinsimilar w directions”– EIF supported project partner Figure 4.4 below highlights some of the key elements of organisational and partnership culture within a shared services context. Figure 4.4: Culture – Key Considerations Organisational culture • Ethos Partnership Culture • Mission, ambitions and intentions • Partner history and relationships • Enthusiasm for collaboration • Personal history and relationships • Commitment to change • Compatability of organisational cultures • Staff motivation and commitment • Trust to organisational agendas The experiences of EIF supported projects have illustrated that an organisations ethos, ambitions and commitment to change are key determinants in its willingness and commitment to the sharing of services, with those Colleges that are committed to continuous improvement and look to innovation as a principal driver of this process, the most likely to be open to sharing. Where there is a lack of compatibility here this creates challenges for the partners involved, as highlighted by a representative from an EIF supported project: 22 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 22 2/15/12 11:39 AM
  23. 23. “ here are differences in the organisational cultures of the three colleges in my judgement. T These, in part, stem from their recent different experiences of inspection where one of the colleges failed its Ofsted inspection. This led to... change in [leadership and] culture of the organisation which arguably was transformational, leading to a very good recent inspection. The other two colleges haven’t experienced these major changes and there is perhaps less... transformational zeal [in these] colleges.” This highlights both the important role leaders play in determining the culture and subsequent direction of travel of their organisation and the significance of the current circumstances or position of the institutions involved. Here it is important to recognise that partners enter collaborative relationships from a range of different starting points, an issue which often has clear implications for the development and outcomes of the partnership. The experiences of EIF supported projects reveal a number of learning points and issues for consideration around this issue. For many EIF supported projects a history of collaboration between partners has been a strong determinant of more transformational shared services proposals. This in turn highlights the significance of a ‘journey of collaboration’ between partners and the strength in developing shared services through a process of evolution rather than revolution. For example one project partner identified a “history of working together and a shared ethos and culture” as a key enabler for their project. The experiences of all projects have highlighted the importance of lead times in building relationships and a shared direction of travel. A number of projects should be seen as having evolved as part of a long term process of collaboration between partners. Indeed where partners have lacked a history of collaboration the shared services agenda is often being taken forward in a phased approach in which service integration and sharing will be explored and implemented in a gradual manner in order to build mutual confidence in the approach. That is not to say that a lack of previous collaboration is an insurmountable obstacle. In fact a number of consultees outlined the positives of such an approach: “ ome colleges in the group had not worked together before and so had the opportunity to S learn from partners that they perhaps wouldn’t have considered working with previously.” However, even where there is a history of collaboration the ‘clash of cultures’ can be seen as detrimental to progress with a project partner involved in one such project suggesting that: “the wide disparity in culture between the six partners has been a barrier to progress” By contrast collaboration between partners with differing cultures has been seen as a positive outcome for a number of project partners with one consultee stating that: “ ringing together public and private organisations, has been a major positive feature of the b [shared services] project” Indeed knowledge and even culture exchange was seen as a positive outcome of the shared services process by a number of partners: “the opportunity to learn from your peers is vast” 23 Research Evaluation of Shared Services Projects | 4529_AoC_research_report_AW2.indd 23 2/15/12 11:39 AM
  24. 24. “ ollaboration can potentially make colleges a bit more like private providers enhancing their c commercial edge and private providers a bit more like colleges by enhancing their social responsibility and commitment to their locality” In recognition of the potential positives to arise as a result of the cross-fertilisation of different cultures some projects actually actively sought to bring together a diverse group of partners with differing organisational cultures within their shared services project: “ bringing together different cultures] was something that the partners were keen to develop [ and the reason why the partnership was made up of the various sectors of the further education sector...in order to anticipate the needs, differences and requirements of each of the different organisations. This has also enabled other spin off partnership working as the different organisations began to work together on this particular shared services project” History between partners is one of a range of factors that determine the compatibility of partners. Issues relating to the increased emphasis on markets and competition within the sector can have a significant impact on organisations openness to collaboration and the relationships and levels of trust between specific organisations. The experiences of EIF supported projects reveal that market forces and issues relating to competition are an important issue within the shared services context and should not be underplayed. For example, one partner cited specific concerns over sharing services with a college they see as a “direct competitor”, while another identified competition as a “significant risk” that “has to be addressed overtly”. Indeed a partner college from another project highlighted the importance of a lack of competition between partners in driving their shared services project forward: “ he colleges involved in the project are not competitors which has helped the development of T supportive relationships.” However, while there is some evidence of a reluctance to share due to competition it is by no means the prevailing sentiment in the sector, with EIF projects also revealing an appreciation that collaboration through shared services can also serve to enhance the competitiveness of colleges and strengthen their position in the marketplace. For example, one particular EIF project is focused on bringing work based learning providers together to enable them to bid for and manage larger, more complex projects in a collaborative manner with an aim to: • Drive growth; • Broaden the provision offered in the area; and • Increase knowledge and expertise across all partner organisations. In another project, it is clear that the project is also seen as a direct response to competing colleges around the project partners, with an explicit acknowledgement of the need to unite to compete. Issues related to concerns over competition and a history of collaboration between partners are closely allied to the trust agenda. All consultees agree that a culture of trust among partners is fundamental to the successful exploration and development of shared services. 24 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 24 2/15/12 11:39 AM
  25. 25. “ t’s about trust, you have to be trusted. It takes time and you need to live it as well as say I it” – EIF supported project partner “ trust] has to be demonstrated on an ongoing basis” – EIF supported project partner [ Smaller organisations can be particularly susceptible to a lack of trust when working with larger colleges due to a fear of shared services being a precursor to merger or takeover. Additionally the area of service being shared also has significant implications for trust levels among partners, as highlighted by one consultee from an EIF supported project: “ trust is] an absolutely essential element – particularly where the sharing of deep [ operational level performance data is to take place. Colleges must have trust in each other and not feel that information is going to be used to market one college over another. Trust and confidence in each other are absolute key elements”. Consequently effective communication, transparency and clarity of purpose and intentions are essential to the successful development of shared services. Indeed, the development of these relationships within the context of the programme has led in at least one case to further examples of bilateral collaboration between partners. This requires both upfront investment in developing relationships and an ongoing commitment to demonstrating trust. One college leader highlighted the fact that levels of trust are fluid within any partnership and as such requires continuous attention: “ trust] has been strongly tested at times however the early investment in building strong [ relationships and trust between principals has meant there was sufficient trust ‘in the bank’ for when the bigger challenges emerged.” The above quote also serves to highlight the potential significance of personal relationships within the collaborative working environment. While shared services are based on the principle of organisational collaboration it is important to recognise that individuals are charged with the responsibility of developing and implementing these services. Consequently individual agency and the impact of personal relationships must be considered. “ ffective collaboration is first and foremost a human and political challenge” E – CIPFA (2010) However, while the presence of strong relationships between leaders can be a positive within this context it is important that projects and collaborative relationships are not based entirely on this. For example, existing institutional college networks play a strong part in building trust, as does commonality of focus, for example in land based or 6th Form colleges. Directing change through existing cultures while simultaneously changing this culture should it pose a challenge or threat to the development of shared services requires effective leadership. This section has illustrated that with cultural and human factors to take into consideration the development of shared services is by no means simply a technical issue, particularly with regard to the early stages. Therefore this requires successful leaders to have social and political skills and awareness and an ability to anticipate and manage sensitivities alongside an ability to operate within a collective leadership environment and an ability to secure support and commitment outside of hierarchical relationships in order to reach consensus. 25 Research Evaluation of Shared Services Projects | 4529_AoC_research_report_AW2.indd 25 2/15/12 11:39 AM
  26. 26. Figure 4.5 below summarises the primary barriers and enablers identified in relation to culture within projects. Figure 4.5: Culture – Barriers and Enablers Barriers Enablers Perceived loss of control Good communications channels Competition Geographical or functional similarities Entrenched management systems Institutional and personal trust Different institutional traditions Shared history of collaboration Common ethos, interests and ambitions Shared learning 4.4 Process The point of the programme is to encourage positive change through sharing services. While leadership and culture underlie the ways in which the tasks are addressed, the processes involved are subject to a range of other factors, not the least of which is organisational capacity. A significant factor impacting on the processes involved was the timescale allowed for project development and implementation. In many cases, the proposed projects were about deep seated shifts in practice across complex functions, and required involvement across a range of roles and functions, many of which, like corporation meetings, have their own timescales. This has meant that a number of projects are still at a very early development stage, making it difficult to assess the extent to which any service or efficiency gains will be achieved. “ hisisastrategicinitiative–earlywinsarelikelytotake2yearsnotthethreemonthsthat T wasexpected.”– EIF supported project partner While it is understood that funding programmes such as EIF are driven by external considerations, not least by the ultimate funder requirements, this factor points to a need for ongoing monitoring of the programme in order to assess the ultimate benefits. Evaluation at this stage is very much of a work in progress, with the outputs from many projects being the identification of potential ways forward, rather than immediate implementation. In at least two of the case studies, where efficiency savings have been identified, it has been through the creation of shared senior management posts between colleges, and it could be suggested that these arise from seizing the opportunity to fill vacancies in an effective manner, rather than being directly attributable to the programme, although participation may be an enabling factor. 26 | Research Evaluation of Shared Services Projects4529_AoC_research_report_AW2.indd 26 2/15/12 11:39 AM

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